This is a non-independent company physically separated from the parent company, but has a certain degree of independence. It usually has its own management, accounting system, balance sheet procedure and business assets.
A dependent branch office (unselbständige Zweigstelle) is very similar to the autonomous branch office, but displays no autonomy from the head office of the company and does not have to be registered in the commercial register.
The only formal requirement for a dependant branch office is registration with the local trade office.
Usually, offices created for serving the market are described as representative offices. However, the term "representative office" does not exist in Germany. Representative offices are considered an example of a business activity that must thus be registered as a branch office in Germany.
Only an office managed by a self-employed external business person (e.g. a commercial agent authorized by the company) can be considered a case in which no independent business activity is conducted on the part of the foreign company. In this specific circumstance, registration with the local trade office is not required.
This is rather a non-independent business branch, dependent in every aspect on the head office, which also is in charge of the central administration.
The distinction between a subsidiary and a branch office is important as it determines whether an entry must be made in the Register of Companies. The distinction is also relevant in determining the place of the actual business in terms of German tax law.
Any foreign corporation outside of Germany can establish a branch office. Especially if a presence in Germany for the purpose of initiating business and maintaining contacts with business partners is wanted, or if a long term commitment in Germany is uncertain, a branch office could be the best suitable business form.
A business branch is part of the foreign company's organization. The legal liability of the branch office depends on the liability of the legal entity of the head office.
An autonomous branch office (Zweigniederlassung) has some degree of autonomy from the foreign head office by having its own management with its own executive powers, separate bank accounts, a separate balance sheet, and independent business assets. Only foreign commercial business persons, who are registered in a commercial register, can establish an autonomous branch office.
The autonomous branch office must be entered in the commercial register and registered with the local trade office.
The application for registration with the commercial register must include detailed information on the foreign company and generally be accompanied by among others notarized in German certified translation of its articles of association as well as of its certificate of registration from the commercial register of its home country.
The application for registration of an autonomous branch office with the commercial register must be certified and submitted by a notary.